Study on RuPay and BHIM-UPI scheme shows 49% global dominance, 94% merchant adoption and rapid expansion to 8 countries

After a decade of the launch of the Unified Payments Interface (UPI), the Department for Financial Services (DFS), Ministry of Finance, has released a comprehensive report titled:

“Socio-Economic Impact Analysis of the Incentive Scheme for Promotion of RuPay Debit Card and low-value BHIM-UPI (Person-to-Merchant) Transactions.”

The report was released during the two-day ‘Chintan Shivir’ (brainstorming session) held on February 13–14 at Coorg, Karnataka.

The study evaluates the Government of India’s incentive framework aimed at accelerating digital payments, strengthening infrastructure, and advancing financial inclusion.

The research was conducted by an independent third-party research agency in consultation with the National Payments Corporation of India (NPCI).

Key Findings: UPI Surpasses Cash, Dominates Digital Payments

UPI Becomes India’s Most Preferred Transaction Mode

1. UPI accounts for 57% of transactions, surpassing cash at 38%.

2. 65% of UPI users report making multiple digital transactions per day.

3. Adoption among youth (18–25 age group) stands at 66%, indicating a digital-first financial behaviour shift.

4. 90% of users reported increased confidence in digital payments after using UPI and RuPay.

5. 74% cited speed of payment as the primary advantage.

6. 52% said cashback incentives motivated adoption.

UPI has emerged as the preferred mode of payment across categories, with high transaction value and volume growth rates.

India’s Global Leadership in Instant Payments

1. India accounts for approximately 49% of the world’s instant payment transactions.

2. UPI’s share in total digital transactions has surged to 80%.

3. Digital transactions increased nearly 11 times during the scheme’s implementation period.

The report describes India’s digital payment ecosystem as being at an “inflection point – high growth achieved, but vast untapped potential requiring focused capital and policy support.”

Merchant Adoption and Digital Infrastructure Growth

94% Merchant Adoption of UPI

1. 94% of small merchants report adopting UPI.

2. 72% of merchants expressed satisfaction with digital payments.

3. 57% reported increased sales following digital adoption.

4. Benefits cited include faster transactions, improved record-keeping, and operational convenience.

Massive Expansion of UPI Infrastructure

1. UPI QR deployment expanded from 9.3 crore to 65.8 crore.

2. Government support accelerated merchant onboarding and reduced cost barriers.

The study highlights coordinated efforts between:

1. Government of India

2. NPCI

3. Banks

4. Fintech companies

5. Payment service providers

Economic Impact: $16.2 Billion Contribution to GDP

According to the report:

• UPI contributed an estimated $16.2 billion to India’s GDP in 2022 through cost savings and operational efficiency gains.

The incentive framework strengthened payment infrastructure and supported a less-cash economy.

Government Incentive Scheme: ₹8,276 Crore Budgetary Support

The Incentive Scheme was introduced in FY 2021-22 and continued through FY 2024-25.

Total Budgetary Support

• ₹8,276 crore allocated.

Year-wise Disbursement:

1. ₹1,389 crore in FY 2021-22

2. ₹2,210 crore in FY 2022-23

3. ₹3,631 crore in FY 2023-24

4. ₹1,046 crore in FY 2024-25

The scheme provided structured support to:

1. Acquiring banks

2. Payment system operators

3. App providers

The objective was to ensure digital payments remained affordable, accessible, and sustainable.

Survey Methodology: 10,378 Respondents Across 15 States

The socio-economic impact analysis is based on:

• 10,378 respondents

  • 6,167 users

  • 2,199 merchants

  • 2,012 service providers

The study covered 15 States across five geographical zones:

1. North

2. South

3. East

4. West

5. North-East

Fieldwork was conducted between July 22 and August 25, 2025 using face-to-face Computer Assisted Personal Interviews (CAPI).

International Expansion of UPI and RuPay

UPI and RuPay are expanding internationally.

UPI is currently live in:

1. UAE

2. Singapore

3. Bhutan

4. Nepal

5. Sri Lanka

6. France

7. Qatar

8. Mauritius

This expansion strengthens India’s digital public infrastructure on a global scale.

Recommendations: The Future of UPI and RuPay

The report states:

1. Value-Added Services

• Integrate micro-credit, insurance, and loyalty programmes.

• Promote advanced features like:

  • AutoPay

  • Credit Line

  • UPI IPO

• Use gamified onboarding and targeted awareness campaigns.

• Enable scheduled payments for:

  • Education

  • Healthcare

  • OTT subscriptions

2. Expand Merchant Acceptance in Tier 2–6 Cities

• Tiered cashback programs for RuPay transactions.

• Subsidise POS terminals.

• Cost-sharing frameworks for QR and PoS expansion.

• Incentivise acquirers and fintech companies.

• Promote interoperability and competition.

3. Improve Rural and Low-Bandwidth Access

• Scale UPI Lite.

• Expand 123Pay.

• Strengthen merchant enablement in rural clusters.

• Optimise bandwidth performance.

4. Financial Inclusion and Sustainability

• Integrate UPI with Direct Benefit Transfer (DBT) programmes.

• Bundle RuPay with Pradhan Mantri Jan Dhan Yojana benefits.

• Launch digital literacy programs targeting female entrepreneurs in rural areas.

• Introduce cost-sharing and recovery models for long-term sustainability.

5. Security and Fraud Prevention

• Deploy AI-driven anomaly detection.

• Introduce real-time fraud alerts.

• Address grievances in a time-bound manner.

Challenges Identified in the Report

Despite strong growth, the ecosystem faces multiple challenges.

1. Network and Infrastructure Gaps

• Poor network and internet connectivity in rural areas.

• Reliability issues requiring significant investment.

2. Cyber Threats

• Fear of data theft.

• Online financial fraud concerns.

3. Lack of Digital Literacy

• Advanced features like:

  • UPI Lite

  • 123Pay

  • AutoPayhave lower adoption rates due to awareness gaps.

The report notes that although UPI adoption is no longer urban-centric, its potential remains “far from fully realised.”

India’s Digital Payments Ecosystem at an Inflection Point

The study concludes:

While UPI has surpassed cash and accounts for 57% of transactions, sustaining momentum will require:

• Digital infrastructure investment

• Fraud mitigation systems

• Awareness campaigns

• Rural merchant enablement

• Sustainable ecosystem funding

A Decade of UPI – From Cash Alternative to Global Digital Leader

Ten years after its launch, UPI has:

• Surpassed cash (57% vs 38%)

• Achieved 49% share of global instant payments

• Expanded QR infrastructure from 9.3 crore to 65.8 crore

• Increased digital transactions nearly 11 times

• Contributed $16.2 billion to GDP (2022)

• Received ₹8,276 crore government support

• Expanded internationally to 8 countries

The next phase of India’s digital payments revolution will depend not just on transaction convenience, but on value-added services, rural inclusion, digital literacy, infrastructure reliability, and ecosystem sustainability.

UPI’s journey over the last decade reflects both rapid adoption and the need for targeted policy support to unlock its full socio-economic potential.